How does job loss affect the timing of retirement?

Sewin Chan, Ann H. Stevens

Research output: Contribution to journalArticle

Abstract

This paper estimates the extent to which reduced employment following job loss among older workers can be explained as a response to altered pension incentives and earnings opportunities. Using data from the Health and Retirement Study, we first examine how workers' earnings, assets, pensions and the resulting financial incentive to retire are affected by job loss. We find important effects of job loss on the main financial components of workers' incentive to retire. We then examine retirement behavior after job loss, controlling for these changed retirement incentives, along with any additional effects of displacement not captured by retirement incentives. We find that the observed increased rates of retirement among displaced workers go far beyond these purely financial considerations. Very little of the reduced employment among older job losers can be explained by changes in wages and pension-related retirement incentives. Other barriers to reemployment may be more important explanations for the low employment rates of recently displaced older workers.

Original languageEnglish (US)
Pages (from-to)403-428
Number of pages26
JournalContributions to Economic Analysis and Policy
Volume3
Issue number1
StatePublished - 2004

Fingerprint

Job loss
Retirement
Incentives
Pensions
Workers
Older workers
Health and Retirement Study
Displaced workers
Assets
Retirement behavior
Employment rate
Financial incentives
Wages
Re-employment

Keywords

  • Displacement
  • Retirement

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

How does job loss affect the timing of retirement? / Chan, Sewin; Stevens, Ann H.

In: Contributions to Economic Analysis and Policy, Vol. 3, No. 1, 2004, p. 403-428.

Research output: Contribution to journalArticle

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